Sometimes Rat Poison Can Be Good!
Sometimes things don't quite turn out like we plan.
Back in Q1 of 2016, Warren Buffett made a very big bet.
He purchased $1 billion worth of AAPL stock.
Fast forward to today and those shares are worth roughly $1.4 billion, even after the massive drop AAPL had the other day.
In normal circumstances earning 40% on your investment in less than 3 years would be considered a pretty good move.
Especially in the stock market.
However, he could have done much much better...
I am sure we all know there are ridiculous exceptions out there and tons of 'what ifs' when it comes to maximizing returns on potential investments...
However, this one is especially interesting because it has to do with something Mr. Buffett was extremely critical of.
In fact he went so far as to call this investment "Rat Poison Squared".
If you know anything about rat poison and math, rat poison squared is a pretty strong criticism for something!
What was he referring to you might be wondering?
None other than bitcoin!
Looking back on his AAPL investment, if Buffett had instead put that $1 billion into bitcoin at the same time, that would now be worth a cool $8.7 billion, even after it has fallen 80% in the last year.
How's that for a 3 year return on rat poison!
That 800% return kinda makes the 40% return in AAPL shares look pretty wimpy...
But wait, there's more...
Ok ok, so bitcoin has had a very nice run over the past few years, but that doesn't mean it's necessarily a better investment than AAPL overall, does it?
Well, actually it's more than just the past few years...
Take a look at this:
(Source: https://twitter.com/tommyp408/status/1080911530508484608)
In terms or returns, bitcoin has bested AAPL in 6 of the last 8 years!
And that includes this most recent year when bitcoin lost over 80%!
In bitcoin's short life span it has a very good history of besting AAPL.
Final thoughts:
While we can't really say for sure whether bitcoin ends up being rat poison or not from current levels, the past and present returns of some of the best tech companies have paled in comparison.
Interesting to see what the next 8 years brings for bitcoin and also AAPL.
I know which one I would rather be long and which one I would rather be short at their current levels.
Stay informed my friends.
Follow me: @jrcornel
It’s anything new and not a comfortable investment. Some people say you can’t touch or hold BTC..... Well you can’t touch or hold a debit/credit card yet millions use them and run electronic transactions every day🙃
Some people just can’t visualize 😊
I have never touched or felt any stocks I have owned either. Though supposedly there is a cert backing up each one. Except exchanges are legally allowed to create 'air shares' in order to keep an orderly market from time to time.
I think he just can’t wrap his mind around something new🙃
Yep, pretty much it.
Warren Buffet does not understand cryptocurrency technology, that is why he has been against it. Resteemed.
And as we know, he doesn't invest in things he does no understand. Which is why he missed both Google and Amazon. However, he went a step further instead of just not investing in it, he bashed it pretty heavily.
Yeah, it is weird. He was bashing it and the interviewer asks him if he was making any best against it. His response what that he didn't know enough about it to bet against it. My question: why bash it if you don't understand it well...
'I don't know enough about it, but I know that it is worse than rat poison!'
-lol doesn't sound like you know enough about it to have that opinion.
Honestly I think it is age. It is tragic, but at 88 things start to go. His investments are starting to contradict his own investment advice.
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Yep, can't be the best forever. He's had a great run. Now perhaps don't comment on things you do not understand, still the GOAT though! :)
Absolutely. Everyone should follow his early advice! That includes the admission that much of his success was lucky timing. I've learned a lot from him.
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Yep, he was invested and involved in the right place at the right time. One could make the argument that the next 80 years of stock market returns won't be anything close to what we saw over the last 80 years, or maybe they will be. :)
How sinister.
Yes, he openly admits he knows nothing about it then bashes it in the same breath.
Yep, doesn't sound like a very intelligent thing to do.
I'm waiting for him to buy gold,,, BOOM
there's a rumor that Buffet may be like PMs again ... he bought Silver back in the 90s or something but sold before it ramped up
Haha, why is that?
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They put rat poison in toothpaste and the water.
And, i find it difficult to compare Apple with bitcoin.
If we were to do that, we would have to compare apple just as it came out with the iPhone and the iPad.
That explosive growth of a new market.
That is what we are seeing in bitcoin.
BUT! Bitcoin's market is the entire financial industry.
Even lack luster adoption will see bigger returns for bitcoin than anything, including tulip bulbs.
Yes, they are definitely apples and oranges (no pun intended). However, given the fact Buffett bashed one while investing heavily in the other, I found it useful to mention both returns. :)
Apple should face electronics they are best at
At times we dont know what we do that could fetch us money and those days crytocurrency has not been so popular as it is these days i think thats why Buffet didnt invest in bitcoin but if they ask him in thousands of time what would he like to invest in, he would surely choose bitcoin
Perhaps, but only if he understands it. He is famous for saying he only invests in things he fully understands.
This comparison will hold with most of the investable universe given how blockchain has developed since its beginning! Still have a great ways to go as adoption grows!
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Yep, and apple and bitcoin will forever be linked due to Buffett!